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    Home > Chemial News > Valuable News > What is the reason behind the feed increase three times in three months?

    What is the reason behind the feed increase three times in three months?

    Echemi 2020-08-10

    Since August, nearly 20 companies, including New Hope, Zhengbang, and Dabeinong, have issued feed price increase notices, with an average increase of RMB 75 to RMB 100 per ton. In June and July, many feed companies have already had two price increases. In 3 months, the feed has risen three times in a row. What is the reason behind it?

    It is understood that the feed produced by the factory is mainly divided into compound feed, premixed feed and concentrated feed. Among them, compound feed is the main force in production and sales. Corn and soybean meal are pre-added, and farmers can feed them directly after purchase, while premixed feed and concentrated feed require farmers to add corn and soybean meal before they can use it. Wang Zhenkai, general manager of Dabeinong Group Anhui District, said that during this period, the price increase was mainly for compound feed. Wang Zhenkai said: "This year, compound feed has undergone four price adjustments, including three price increases and one price reduction. Especially the two most recent price increases. A price adjustment was made at the end of June, floating at 100 yuan. Around, another adjustment was made at the end of July, about 50 yuan."

    According to reports, the main reason for the increase in the price of compound feed is the increase in the price of raw materials. Since March, the price of corn has risen sharply. Corn futures rose from 1,920 yuan per ton to nearly 2,300 yuan, an increase of nearly 20%, a 4-year high. Corn is the main raw material for pig feed. Zhu Zengyong, an associate researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine of the Chinese Academy of Agricultural Sciences, said that starting from the fourth quarter of 2019, the recovery of live pig production capacity has led to an increase in feed demand, which has driven up feed prices to a certain extent. Zhu Zengyong said: "From 2018 to 2019, China's live pig production capacity was on a downward trend, and feed demand was also declining. At that time, for feed, the overall output was in a state of decline, and the demand for corn and soybean meal was declining. But from 2019 Since the fourth quarter, live pig production capacity has continued to recover. Especially since February 2020, the increase in the supply of piglets has led to the continuous recovery of the entire pig stock. The demand for feed has continued to increase, which has driven the current increase in the overall corn price."

    In order to improve the survival rate of animals and the quality of meat, it is imperative to completely prohibit the addition of antibiotics in feed. Before and after the new policy, feed prices have risen by nearly 15% in just two to three months. How does this price increase affect the feed industry? Will the price increase of feed drive up the price of meat?

    Feed is mainly used for breeding pigs and poultry. The question that ordinary consumers are more concerned about is: Will the price increase of feed drive up the price of pork and poultry? Zhu Zengyong said that price fluctuations in upstream feeds have little impact on meat prices. Whether it is meat or poultry, prices are more affected by the relationship between supply and demand. Zhu Zengyong said: “From the perspective of poultry meat, the current supply of poultry meat is relatively abundant. Therefore, changes in feed prices have little impact on poultry meat prices. For live pigs, feed prices have an impact on the part of the farming of purchased piglets. Relatively speaking, households have a relatively large impact, which increases their future market risks to a certain extent. However, in terms of the price of live pigs and pork, the main factor affecting prices is supply and demand. At present, because the overall pig breeding benefits are relatively good, farmers are enthusiastic Relatively high. Despite the increase in feed costs, the income of breeding is still at a historical high, so it does not affect the current recovery of the entire pig production capacity."

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